Navidad silver resource grows by 52%

Vancouver — Aquiline Resources’ (AQI-T, AQLNF-O) Navidad silver-lead project, in Argentina, has grown to become one of the biggest silver deposits in the world, according to a new resource estimate.

Navidad hosts 127.7 million tonnes grading 110 grams silver per tonne and 1.06% lead in the measured and indicated categories, as well as 49 million inferred tonnes grading 97 grams silver and 0.5% lead. That adds up to 453 million measured and indicated oz. silver plus 153 million inferred oz. of the precious metal, and 3 billion lbs. measured and indicated lead, plus 546 million inferred lbs. lead.

“The first thing that stands out is the size,” says Aquiline president and CEO Marc Henderson. “This project now clearly ranks as one of the best silver deposits found in this mining cycle, among the best in the world.”

The new resource estimate increases Navidad’s measured and indicated silver resources by 52% compared with the last estimate, from May 2006. Including inferred resources, the deposit grew by 88%. The average silver grade also rose, by 10%. While the May 2006 resource estimate included 254 drill holes distributed over five mineralized zones, the new estimate incorporates an additional 265 drill holes and adds two new zones to the deposit: Barite Hill and Loma de La Plata.

“Overall, the finding cost for the current resources using current metal prices is on the order of five cents per ounce, which is pretty good value in terms of exploration,” Henderson says.

Loma de La Plata, which, unlike the other six zones, does not lie on the Navidad trend but sits alone some 2 km west, has proven to be a significant addition to the resources at Navidad. The resource at Loma is mainly inferred, with 9.1 million indicated tonnes grading 225 grams silver and 17.3 million inferred tonnes grading 159 grams silver. Even so, Loma currently contributes 15% of the total measured and indicated resources at the project; further drilling to upgrade resources is under way.

Interestingly, mineralization at Loma contains very little lead, unlike the Navidad-trend deposits. Silver is hosted in the upper latite breccia. The zone has been traced for 750 metres of strike length, with an average width of 250 metres, and an average thickness of roughly 23 metres. Loma remains open to the north and northeast. Some of the best recent results from Loma include hole 555, which returned 47 metres of 244 grams silver, and hole 557, which cut 10.5 metres of 1,162 grams silver.

“The other big takeaway from this report is how the Loma de la Plata discovery is really important, both in terms of ounces, but also because the configuration of the zone means it’s amenable to open-pit mining methods,” Henderson says. “And where Galena Hill has metallurgical challenges, we believe Loma will be more like Navidad Hill, where the metallurgy is fairly simple.”

At the Calcite NW extension zone, which sits at the northwest end of the Navidad trend zones, 18 recent holes returned consistent results. Hole 584, which intersected 16.6 metres grading 51 grams silver per tonne and 0.7% lead, shows the zone remains open to the northwest; hole 587, which returned 23.3 metres of 168 grams silver and 0.42% lead, shows the remaining expansion potential to the southwest; and hole 567, which cut 52.4 metres of 34 grams silver and 0.67% lead, further demonstrates the pattern of thicker mineralization towards the northeast.

There are no recent drill results for Calcite Hill, the next zone moving southeast along the trend, but the resource estimate pegs the zone’s measured and indicated resource at 15.4 million tonnes grading 98 grams silver and 0.71% lead, plus inferred resources at 4 million tonnes grading 76 grams silver and 0.31% lead. Similarly, Navidad Hill has not seen drilling of late, but already hosts 48 million measured and indicated oz. silver plus 8 million oz. inferred silver, plus considerable lead.

Continuing southeast, the Connector zone returned recent drill results that show open mineralization to the north, especially hole 556, drilled on the northern edge of the resource boundary, returning 176 grams silver over 40.7 metres. And at Galena Hill, stepout drilling to extend the resource boundary to the east returned a best intercept of 10.2 metres averaging 67 grams silver.

The resource increase boosted Aquiline’s share price by 32 or 3% to close at $10.84 on 590,000 shares exchanged. The company has a 52-week trading range of $5.40-12.25 with 54 million shares issued.

Since taking control of the project in November 2006, Aquiline has drilled 262 holes for 44,000 metres, which makes up roughly 40% of the total drilling completed on the property.

IMA Exploration (IMR-V, IMR-X) controlled the property before Aquiline, until it lost a legal battle that reached its apparent resolution this summer.

In July 2006, the B.C. Supreme Court found that IMA had staked Navidad using unauthorized data, and ordered IMA to hand the project over to Aquiline. IMA appealed, but lost in June 2007. Aquiline is required to reimburse IMA the $18.5 million spent on exploration before Aquiline’s victory.